Even relatively small scams will be met with stiff punishment if they involve senior customers, the Financial Industry Regulatory Authority Inc. signaled Monday.
The broker-dealer regulator
barred Jeffrey C. McClure from the securities industry for stealing almost $89,000 from an elderly client's bank account between December 2012 and August 2014.
Mr. McClure used 36 blank, unsigned checks to deposit the money into his own checking account to cover personal expenses, Finra alleged. The client had given Mr. McClure access to the checks to pay some of her bills, such as rent.
Mr. McClure worked for Wells Fargo Advisors and an affiliated bank in Chico, Calif. He was terminated Oct. 23. He settled with Finra without admitting or denying its findings. The bank repaid the client.
“Finra has a zero tolerance policy for brokers who steal from their clients, especially those who are the most vulnerable,” said Brad Bennett, Finra executive vice president and chief of enforcement. “Rooting out this type of misconduct and removing these kinds of bad actors from the industry is a top priority.”
A lawyer for Mr. McClure, Brandon T. Williams, was not immediately available for comment. Mr. McClure had no prior disciplinary history with Finra.
The case makes an emphatic point for Finra about elder financial abuse, which it included on the
examination priorities list it released earlier this year. State regulators also have elevated the issue. Earlier this fall, the North American Securities Administrators Association
formed a Committee on Senior Issues and Diminished Capacity.
Finra also is using the case to underscore its initiative to target rogue brokers, said Daniel Nathan, a partner at Morrison & Foerster.
“It's an effort to show they're going after bad brokers and rooting them out of the industry,” said Mr. Nathan, a former Finra vice president and director of regional enforcement. “It's a bad broker ripping off a senior. There's not much worse than that.”
By making an example of the case, Finra may also be nudging brokers to act in the best interests of their clients, even though they are not governed by a fiduciary-duty rule.
“The bigger point here is that you've got to treat your clients like you care for them,” said Todd Cipperman, managing principal at Cipperman Compliance Services. “My advice to brokers is to put their clients' interests first. It's not just good compliance. It's good business.”
